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EuropeFX: Everything you need to know about CFDs trading

  
  Analysis
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What you need to know about trading CFDs

EFX
Contracts-for-difference (CFDs) are popular trading instruments that provide investors with unique potential opportunities to profit in specific markets. This includes taking advantage of certain assets price movement, without actually owning the asset itself.

Thousands of CFDs exist, which are now a common fixture amongst brokerages’ offerings. CFDs are quite simplistic, as profit is calculated as the difference between the entry point of the trade and its exit point.

Popular types of CFDs

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Be Flexible-5 Points to Win in Trading

  
  Education
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Flexibility for the trader  to move with price action is the key to successful trading. You can be rigid with your rules and risk management but you must be flexible when it comes to how the future plays out in price action for any market or stock. It is not those that predict the future that make a lot of money in trading but those that react to what is actually happening that are able to profit from price action.

  1. The ability to change your mind and reverse your trade in the other direction when proven wrong  is a powerful trait.
  2. The ability to admit you are wrong and take your stop loss can save your account.
  3. Put your ego aside and look at what is happening not what you believe should happen.
  4. Trade price action not your opinions.

  5. Always realize the markets are bigger than you are, they are always right.

‘The Psychology of Trading-Book Review

  
  Education
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Author Brett Steenbarger has done a great job with this book. He covers what I personally believe is the most important element in trading: psychology.

New traders will probably not last through their first year in the markets without blowing up their accounts by taking losses too personally. Many times draw downs cause traders to start gambling when they become desperate to recover their losses. Many times increasing position size when they should be decreasing it is an ego-driven desperation to get back their losses. Other similar bad mental behaviors creep into our trading careers as dysfunctions in our personal lives cloud our minds from being able to make the right decisions in following our systems and established trading principles.

What this book shows is how to take the proper perspective and observe our greed and fear, enabling us to see them for what they are instead of getting caught up in these powerful emotions that lead to terrible consequences in our accounts and lives.

This book is a very good book on both psychology and trading. It is packed with lessons from the authors patients and his own experiences. What the book shows is that we are the most important element in our trading. We must have the right mind set in trading, and while developing as a trader we need to keep a log of the emotions we feel on our losses and wins to better understand ourselves and why we make emotional charged decisions that we shouldn’t while trading. (more…)

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